France's TotalEnergies seeks stake in consortium to build Syrian-Iraqi pipeline

French energy company TotalEnergies is seeking to join a new international consortium aiming to build a pipeline for exporting Iraqi oil to the Mediterranean, according to its CEO Patrick Pouyanne. The pipeline, known as the Basra-Baniyas pipeline, would provide Iraq with an alternative route to export crude oil, bypassing the Strait of Hormuz which has been closed since a joint US-Israeli attack in June 2021.

Pouyanne disclosed this news at a ceremony in Paris, where France and Iraq signed several agreements. Sources suggest that TotalEnergies is aiming for a 10% stake in the consortium, which would enable it to play a role in developing the pipeline and providing Iraq with an alternative oil export route. The Iraqi Prime Minister, Ali Al Zaidi, traveled to Paris to discuss these matters before heading to Berlin.

The pipeline project, which would allow Iraq to export oil from its southern oilfields in Basra to Baniyas on Syria's Mediterranean coast and beyond, has been endorsed by the Iraqi government as a solution to the country's oil export issues. TotalEnergies announced its involvement in the consortium in August, alongside Chevron, Qatari-Syrian company UCC Holding, and US investment company TI Capital.

The estimated cost of the pipeline is $15 billion, with construction expected to take at least four years. However, recent drone attacks on a Saudi pipeline have raised concerns about the vulnerability of infrastructure in the region. Iraq has been actively exploring various pipeline projects, including the revival of a pipeline built in the 1950s between Baniyas and Kirkuk in northern Iraq, which previously had a capacity of about 300,000 barrels a day.

During his visit to Iraq, Pouyanne signed a preliminary agreement with the Iraqi Ministry of Electricity, Ali Wahib, for TotalEnergies to enhance Iraq's supply of liquefied natural gas. Other agreements between Baghdad and Paris covered defense, data infrastructure, and civil aviation. Pouyanne has repeatedly emphasized the need for his company to diversify routes in the Middle East, given that the country is a significant producer of oil in the region.

He stated that diversifying routes to circumvent the Strait of Hormuz is one of the top priorities for TotalEnergies, which has operations in Abu Dhabi and Iraq.